The evolution of law under communism and post-communism: a system-theory analysis in the spirit of Luhmann

AbstractThe paper suggests that Luhmann’s theory of social systems and evolution offers a powerful approach for analyzing law and the economy. It considers Yugoslavia and some Central European countries before and after 1990. Luhmann’s concept of evolution stands in stark contrast to mainstream economic theory. It enables us to clarify the concept of transformation. A transformation became necessary because communism was an evolutionary dead end. According to this view, in postcommunism the primacy of functional differentiation needs to be reestablished because it was partially reversed under communist rule. In these circumstances, the popular call for “sufficient” public control over the market is asking for the impossible. Post-communist law is bound to fall behind the evolution of markets. This causes economic problems and retards financial deepening.